Overview of the Family Mortgage Program
Russian President Vladimir Putin stated that authorities will definitely extend the preferential family mortgage program by 6 percent after July 1, 2024. This pledge was made on January 23 during a meeting with participants and winners of national family competitions. He had previously signaled the need for such an extension, and Deputy Prime Minister Marat Khusnullin called family mortgages the most popular state program among Russians in the prior year.
What is a family mortgage
The family mortgage is available to Russian families where the first or a subsequent child was born between January 1, 2018 and December 31, 2023. The program offers a preferential rate not exceeding 6 percent per year, with a reduced rate of 5 percent for the Far Eastern Federal District for births from January 1, 2019. The down payment can be up to 20 percent of the home price. Eligible borrowers include families raising children with disabilities or parents of adopted children, provided the child’s birth date falls within the specified window. Loans under this program can extend up to 30 years.
In major cities such as Moscow, the Moscow region, and St. Petersburg with the Leningrad region, the maximum loan amount at the 6 percent preferential rate is 12 million rubles, while in other regions it is capped at 6 million rubles.
According to DOM.RF, the first three weeks of January saw roughly 12,000 family mortgage loans totaling around 77 billion rubles. Analysts note that this pace outstrips the same period in the previous year. With current program terms valid through July 2024, forecasts estimate first-half issuance could approach the level seen last year, roughly 550 billion rubles across about 130 thousand loans, according to Mikhail Goldberg, head of the DOM.RF Analytical Center, in an interview with socialbites.ca.
Support for the program from lawmakers is evident. Anatoly Aksakov, chairman of the State Duma Financial Market Committee, expressed full backing for extending the program, emphasizing the goal of enabling families with children to secure housing and to plan their finances with confidence. He argued that extending the program’s validity would distribute demand more evenly and reduce rush behavior, allowing buyers to assess their financial capacity calmly rather than rushing to act before an imminent deadline.
Deputy Chairman of the Russian Banking Association, Alexey Voylukov, suggested that 2024 mortgage issuance would not surpass 2023 records due to tighter program conditions and the elimination of the down payment, along with stronger macroprudential rules on banks. Deputy Finance Minister Ivan Chebeskov indicated close monitoring of the market by the Finance Ministry, underscoring the aim to improve living conditions for citizens and to shift mass benefit programs toward more targeted formats for greater effectiveness.
Family Mortgage Outcomes
Independent analysts highlight that family mortgages have helped more than a million Russian families address housing needs. In 2023, demand for family mortgages was strongest in Moscow, the Moscow region, and St. Petersburg, with significant activity observed in the Krasnodar Territory and Tyumen region. As prices rose in recent years, smaller housing options such as one-bedroom apartments and studios have become increasingly popular among young families with children.
Experts note that housing prices are unlikely to fall sharply, though stabilization is possible if program timing becomes clearer and expectations are managed. The broad scope of the preferential program is seen as critical in avoiding unintended market distortions while continuing to support family needs.
Preferential Mortgage Risks
Russia’s banking sector reports a mortgage portfolio around 18 trillion rubles, a figure echoed by officials. Mortgages backed by real estate collateral are traditionally viewed as high-quality assets due to strong recovery prospects, contributing to a relatively low default rate—well under one percent in many cases. Overdue mortgage debt levels have remained modest in aggregate terms.
Analysts stress that young married couples are among the most reliable borrowers, though caution remains about potential shifts if economic conditions change. The preferential rate is designed to reduce monthly payments compared with market terms, which can range higher. While credit risk in this niche remains comparatively controlled, uncertainties about the program’s horizon may influence consumer decisions.
In some scenarios, buyers mix different financing tools, using a consumer loan to cover a down payment before securing the concessional mortgage. This can elevate the overall debt burden for a family, and trends suggest debt levels have been gradually increasing.
Strategies for Improvement
One main obstacle to expanding family housing is cramped living space. As a result, DOM.RF has proposed additional discounts on family mortgage rates for larger apartment purchases. Policymakers emphasize supporting large families and ensuring access to multi-room homes. Construction remains skewed toward smaller units, underscoring the need for an integrated approach that aligns housing supply with the purchasing power of families with children. Proposals include reducing the minimum down payment and increasing loan amounts to broaden access. Experts also advocate planning developments to accommodate the needs of qualifying households, with price levels calibrated to family budgets. A consensus exists on the importance of a coherent strategy that links housing supply, pricing, and family needs.
Industry representatives also suggest including families expecting a second or subsequent child born in 2024 under the program, aligning eligibility with evolving demographic goals. This would help more couples realize the dream of owning a home while expanding the program’s impact.